Zalando: Net-zero targets the first step to net-positive businesses

EXCLUSIVE: Zalando's director of corporate responsibility and sustainability Kate Heiny believes that operating at net-zero emissions both operationally and across the value chain can act as a catalyst for businesses to truly move beyond mitigation and "less bad" to help regenerate the planet.

Zalando will set a science-based target in 2020

Berlin-based Zalando, the online fashion and beauty platform that caters to 28 million customers in 17 markets, has committed to carbon neutrality in its own operations and all of its deliveries and returns.

As of Wednesday (30 October), the company is operating as a net-zero emission business, having reduced energy consumption, procured renewable power contracts and offset all deliveries and returns from transport.

The focus on carbon is part of a wider do.MORE sustainability strategy launched to the media at a bespoke event in Berlin on Wednesday (30 October). The broad aim of the strategy is for Zalando to become a net-positive business through its societal and planetary contributions

Speaking to edie at the Berlin event, Zalando’s director of corporate responsibility and sustainability Kate Heiny said that setting and reaching net-zero targets would spur the company and hopefully those it interacts with towards net-positive contributions to society and the planet.

“The creation of this strategy started in May 2019,” Heiny told edie. “It’s been a very big push for the team. What’s been most exciting is the engagement from Zalando employees, they’re very eager to push for higher aspiration.

“Part of the principles of net-positive to us is ensuring that your carbon footprint is neutral and where you can contribute positively to society and the environment you develop and demonstrate the methodology to do so.”

According to Forum for the Future, net-positive is a "new way of doing business which puts back more into society, the environment and the global economy than it takes out".

Zalando will attempt to demonstrate this methodology by setting a science-based target in 2020 to help drive emissions reductions down further. As is the case with new submissions to the Science Based Targets initiative (SBTi), Zalando’s eventual commitment will be aligned to “well below” the 2C pathway envisioned by the Paris Agreement.

Heiny noted that the company had recently switched to renewable energy to power 90% of its energy needs globally and carbon emissions that are not eliminated by operational improvements or green delivery options that are set to be rolled out will be offset.

Emissions from deliveries and returns, which account for 80% of the company’s carbon footprint, are currently being offset, with innovative and electric delivery methods set to be trialled and upscaled over the coming years.

Heiny reiterated that offsetting the emissions was a short-term measure and that the publication of the science-based targets would outline how Zalando plans to drive down emissions from logistics.

“Offsetting is a cost to the business, and they are not the answer, “Heiny said. “We’re doing it today because we believe it shows our commitment. We will continue to seek more and more ways to decarbonise, but for those that we cannot reduce, offsetting will always be a part of our process.”

The company is currently trialling electric vehicles and last-mile delivery bikes in cities such as Hamburg and Zurich.

Net-positive

As an e-commerce fashion platform, Zalando is uniquely positioned to influence approaches to sustainability across the value chain.

For consumers, the online platform features an opt-in option to offset carbon emissions associated with consumers receiving and collecting their parcels, which are bundled to try and ensure that just one parcel is delivered, no matter how many items are ordered.

But as part of the eventual science-based targets, the company’s relationship with the brands it sells on the platform, including fashion heavyweights like Nike, Burlington and boohoo, could change.

“For the retailer, the Scope 3 aspect of our science-based target will really have to start to include the brands that are on the platform and part of the business model, so a key discussion will be how we interact with them.”

Zalando’s chief executive Rubin Ritter confirmed at the Berlin event that it would cease partnerships with brands that didn’t act sustainably, but that the metrics of what could lead to this hadn’t been defined. However, it could reach a point that Zalando removes brands from its platform based on sustainability performance.

What constitutes sustainability performance remains unclear. But it is clear that Zalando views carbon management as a key step towards net-positive. The company also has targets in place to increase ethical sourcing standards as part of the firm's Sustainable Apparel Coalition (SAC) membership and generate 20% of Gross Merchandise Volume (GMV) - total sales value for merchandise sold through the platform - from sustainable products.

On GMV, 260 million products fell into the sustainability category in 2019. Ritter noted that reaching the 20% target would acquire the figure to surpass three billion.

In its bid to reach net-positive status, Zalando is aware of the role it will play in spurring decarbonisation across the value chain and the wider fashion sector. Heiny hoped that science-based targets becoming the norm would help the sector transition to a net-zero future while avoiding greenwash.

"I’m eager for science-based targets to become the norm," Heiny added. "I really think that in a sea of sustainability language and metrics, there are only a few cases where we can focus on trusted metrics and I’m excited about the change that this can drive. I’m excited for it to surpass the tipping point for science-based targets."